Applicant Finger Lakes LPG Storage, LLC (applicant or Finger Lakes LPG), a subsidiary of Crestwood Midstream Partners, L.P. (Crestwood), applied to the Department of Environmental Conservation (Department) for permits to construct and operate a new underground liquefied petroleum gas (LPG) storage facility for the storage and distribution of propane on a portion of a 576-acre site located on NYS Routes 14 and 14A west of Seneca Lake in the Town of Reading, Schuyler County, approximately 2.5 miles north of the Village of Watkins Glen (Seneca Lake facility). The storage facility would use existing solution-mined underground caverns in the Syracuse salt formation created by U.S. Salt, LLC (an affiliate of Finger Lakes LPG owned by Crestwood [U.S. Salt]) and its predecessors' salt production operations. The existing caverns are located near the western shore of Lake Seneca. Associated surface facilities would extend uphill to the west with compressors east of NYS Route 14 south of the intersection with NYS Route 14A. A brine pond and flare stack would be located south of NYS Route 14A west of the intersection with NYS Route 14.

Department staff referred the matter to the Department's Office of Hearings and Mediation Services for permit hearing proceedings pursuant to 6 NYCRR part 624 (Part 624) with the undersigned presiding. After conducting a pre-adjudicatory hearing issues conference, I issued a ruling on issues and party status ( see Matter of Finger Lakes LPG Storage, LLC , Ruling of the Chief Administrative Law Judge [ALJ] on Issues and Party Status, Sept. 8, 2017 [Issues Ruling]).[1]In that ruling, I reopened the issues conference record for clarification and possible further record development on the issue of possible alternative project sites ( see id. at 61-65, 73). Accordingly, I gave applicant until September 22, 2017, to confirm whether it owned or had options on other sites in New York that contain salt caverns other than applicant's Savona LPG facility and, if so, to provide an alternatives analysis for those sites. I authorized Department staff and full party status petitioners Seneca Lakes Pure Waters Association (SLPWA), Gas Free Seneca (GFS), and the Seneca Lake Communities (SL Communities)[2] (collectively "petitioners") to respond to applicant's submissions by October 6, 2017 ( see id. at 73).

With respect to the remaining issues proposed for adjudication raised by petitioners, I concluded that petitioners failed to raise any issues under ECL article 23 or the State Environmental Quality Review Act (ECL art 8 [SEQRA]). Nevertheless, I accepted petitioners' submissions as filed as comments on the draft supplemental environmental impact statement (DSEIS) prepared in this matter.

With respect to party status, I denied the late-filed petition for full party status filed by Schuyler County Legislators Harp and Lausell, and denied SLPWA's application to supplement its party status petition to raise an issue concerning the authority of the State Geologist to approve applicant's project ( see id. at 41-43, 71-73). I granted amicus party status to all amicus party petitioners ( see id. at 72-73). I reserved decision on full party status for SLPWA, GFS, and SL Communities pending completion of the SEQRA record on alternative sites ( see id. at 71).

By letter dated September 22, 2017, applicant confirmed that it does not own or have any options on other sites in New York that contain salt caverns other than the Savona LPG facility ( see OHMS Doc. No. 00079). Petitioners each filed responses to applicant's September 22, 2017 submission: SL Communities' submission is dated October 5, 2017 (OHMS Doc. No. 00080), and GFS's (OHMS Doc. No. 00081) and SLPWA's (OHMS Doc. No. 00082) submissions are each dated October 6, 2017.

By letter dated October 11, 2017, Department staff objected to the October 5 and 6, 2017 submissions by SL Communities, GFS, and SLPWA, and requested that they not be considered part of the record of this proceeding on the ground that the submissions went beyond the issue of applicant's alternative sites. In the alternative, staff requested permission to respond to petitioners' submissions. By email dated October 13, 2017, I reserved decision on staff's request to reject the submissions, but granted staff's request for permission to submit a response. Department staff filed its response dated October 27, 2017 (OHMS Doc. No. 00083).

In a letter from GFS dated October 31, 2017 (OHMS Doc. No. 00084) and letters from SLPWA dated October 31, 2017 (OHMS Doc. No. 00085) and November 1, 2017 (OHMS Doc. No. 00086), petitioners requested permission to further supplement the record on alternatives with press releases announcing Crestwood's sale of U.S. Salt to an affiliate of Kissner Group Holdings LP ( see OHMS Doc. No. 00084, Exhs A and B). Petitioners assert that without the U.S. Salt facilities, Finger Lakes LPG cannot operate its LPG storage facility as described in the DSEIS, the availability of the U.S. Salt plant and brine ponds at the Finger Lakes facility is no longer a feature that makes the Finger Lakes facility preferable over the alternative Savona LPG facility, and Finger Lakes LPG may no longer be able to comply with ECL 23-1301(1)(c), which requires an applicant for an underground storage of gas permit to own or control at least 75 percent of the storage rights in the storage reservoir and buffer zone, among other arguments. Finger Lakes LPG filed a response to petitioners' letters by letter dated November 2, 2017 (OHMS Doc. No. 00087).

II. DISCUSSION - ALTERNATIVE SITES

SEQRA requires that a draft EIS include a detailed statement setting forth alternatives to the proposed action ( see ECL 8-0109[2][d]). Among the alternatives to be considered are alternative sites for the project ( see 6 NYCRR 617.9[b][5][v]). Where, as here, a private project sponsor is involved, site alternatives may be limited to parcels owned by, or under option to, the private sponsor ( see id. ).

The issues conference record was unclear whether applicant owned or had options on potential alternative project sites other than its Savona LPG facility. Accordingly, in the Issues Ruling, I directed applicant to confirm whether it owned or had options on other sites in New York that contained salt caverns other than the Savona facility and, if so, to provide an alternative analysis for those sites ( see Issues Ruling at 65, 73).

In its September 22, 2017 response, applicant confirmed that it did not own or have options on other sites in New York other than the Savona LPG facility ( see OHMS Doc. No. 00079). Petitioners' submissions in response do not dispute applicant's confirmation or otherwise raise adjudicable issues concerning alternative project sites under applicant's control. Accordingly, no adjudicable issues on alternative project sites under applicant's control are presented.

In their October 5 and 6, 2017 submissions, however, petitioners raise two new developments since the 2015 issues conference they assert are relevant to the DSEIS's alternatives analysis and should be considered in this proceeding. The first development is the opening of a new, fully operational propane rail terminal in Montgomery, Orange County, New York, by applicant's parent company, Crestwood ( see e.g. Press Release, Crestwood Announces the Opening of its New Propane Rail Terminal in Montgomery, New York , OHMS Doc. No. 00081, Exh A). Petitioners argue that the Montgomery facility replaces the proposed Seneca Lake facility as a propane distribution center for the northeastern United States.

The second development is applicant's expansion of the storage capacity of its Savona LPG facility. Petitioners note that applicant has applied for and received permits from the United State Environmental Protection Agency (EPA) to create and expand existing and future storage caverns at the Savona facility ( see OHMS Doc. No. 00081, Exhs B and C). Petitioners argue that the additional storage capacity approved by the EPA at the Savona facility, coupled with the large volume of product Crestwood can distribute from the Montgomery facility, constitute reasonable and feasible alternatives to the proposed Seneca Lake facility that avoid adverse environmental impacts to Seneca Lake and the surrounding community, and should be considered as part of the "no action" alternative under SEQRA for this project.

Department staff objects to inclusion into the record of petitioners' October 2017 submissions on the ground that they go beyond the issue of alternative sites for which they were authorized. On the merits, Department staff asserts that, given applicant's objective - to establish a LPG distribution center in depleted salt caverns to service the New York LPG market - neither the Savona facility nor the Montgomery facility constitute reasonable and feasible alternatives to the proposed Seneca Lake facility. Department staff notes that the Savona facility is already being used to store LPG and that it would take over twenty years to develop cavern space, with concomitant environmental impacts associated with solution mining and brine disposal, to replace the storage capacity already available at the proposed Seneca Lake facility. With respect to the Montgomery facility, staff notes that its above ground storage capacity is less than one percent of the proposed capacity of the Seneca Lake facility, and that no underground salt caverns can be developed at the Montgomery site because of a lack of salt beds in that location. Accordingly, staff argues that neither facility constitutes a reasonable alternative to the proposed Seneca Lake facility.

As petitioners note, a lead agency under SEQRA is under a continuing duty to evaluate new information relevant to the environmental impact of its actions, and provide for additional record development if necessary ( see Glen Head - Glenwood Landing Civic Council, Inc. v Town of Oyster Bay , 88 AD2d 484, 494-495 [2d Dept 1982]; see also Matter of Jackson v New York State Urban Dev. Corp. , 67 NY2d 400, 429-430 [1986]; 6 NYCRR 617.9[a][7]). Here, the new information is not related to an adverse environmental impact from applicant's proposed Seneca Lake project. However, the new information is relevant to both the "no action" alternative to the project, and the project's purpose, public need and benefits ( see 6 NYCRR 617.9[b][5][i], [v]). No factual dispute is raised by petitioners' or staff's submissions and, thus, no adjudicable issues are presented. However, petitioners' October 5 and 6, 2017 submissions and Department staff's response are accepted as filed as comments on the DSEIS, and the record on project alternatives is closed.

Finally, with respect to petitioners' October 31 and November 1, 2017 submissions, applicant states that although Crestwood is selling U.S. Salt, the sale does not impact the Finger Lakes project. Applicant asserts that in November 2011, U.S. Salt conveyed by deed the property that constitutes Finger Lakes Galleries 1 and 2, and the agreement to sell U.S. Salt does not impact that property ownership. Applicant also asserts that it retains the right to install over U.S. Salt's property the water, brine, and product pipelines that are part of the Finger Lakes project. Applicant also retains the ability to send brine to and obtain brine from U.S. Salt if needed. Accordingly, the sale of U.S. Salt raises no adjudicable issues concerning Finger Lakes LPG's compliance with the ECL or the sufficiency of the DSEIS. The parties' submissions are accepted as filed to clarify the record regarding the impact of the sale of U.S. Salt on applicant's project.

III. RECORD

Contemporaneous with the Issues Ruling, I also issued a ruling on applicant's motion to affirm the confidentiality of documents contained on a compact disc of materials that applicant submitted to the Department in support of its application ( see Matter of Finger Lakes LPG Storage, LLC , Ruling of the Chief ALJ on Motion To Affirm Confidentiality of Protected Materials, Sept. 8, 2017 [Confidentiality Ruling]). Applicant argued that the documents were exempt from disclosure under the Freedom of Information Law (Public Officer Law art 6 [POL or FOIL]) on the ground that they contained information exempt from disclosure under ECL 23-1303, that they contained confidential commercial information, trade secrets, or critical infrastructure information, or that they were exempt from disclosure under a combination of grounds.

In the Confidentiality Ruling, I granted in part and otherwise denied applicant's motion ( see id. at 20). With respect to the denial in part, I concluded that some documents were releasable either in whole or subject to redaction as indicated on the confidential documents list attached to the Ruling ( see id. , Appendix A). I directed applicant to provide the ALJ and the parties to the confidentiality agreement and order issued in this proceeding with a copy of a redacted version of applicant's revised response to the Department's second notice of incomplete application dated November 17, 2010 ( see id. , Item No. 51) and an unredacted version of applicant's April 11, 2012 Gallery 10 work plan report, exhibits A and B ( see id. , Item No. 62). I also directed applicant to provide me with an unredacted copy of the well 58 cross section ( see id. , Item No. 69) for in camera review.

Under cover of a letter dated September 14, 2017, applicant provided the documents as directed. With respect to the well 58 cross section, I agree with applicant that it is a page from a March 26, 2013 sonar report that was submitted to the Department in its entirety on July 1, 2013 ( see id. , Item No. 70), which I determined in the Ruling is exempt from disclosure. Accordingly, no further ruling regarding the confidentiality of the cross section is necessary.[4]

Pursuant to the confidentiality agreement and order, and the Confidentiality Ruling, the parties had five business days from the issuance of the Ruling to move for reconsideration pursuant to 6 NYCRR 624.6(c), or seek leave to file an expedited appeal to the Commissioner pursuant to 6 NYCRR 624.8(d). No motions were filed and the time to seek leave to appeal from the Ruling has expired.

Accordingly, those documents I determined are releasable in whole or subject to redaction will be included in both the electronic and hard copy of the official hearing file. I request that Department staff post the documents I have determined are releasable, in whole or subject to redaction, on the Department's website page that contains applicant's application materials.

IV. RULING AND ORDER OF DISPOSITION

Full party status petitioners SLPWA, GFS, and SL Communities have failed to raise any adjudicable issues concerning available alternative sites for applicant's project. Because petitioners have not raised any issues under ECL article 23 or SEQRA requiring adjudication, the petitions for full party status are denied ( see 6 NYCRR 624.5[d][1][ii]). Petitioners' filings, including the October 5 and 6, 2017 submissions, as well as Department staff's response, are accepted as filed, however, as comments on the DSEIS and may be considered by the final agency decision maker when making SEQRA findings.

Pursuant to 6 NYCRR 624.4(c)(5), further hearings in this proceeding are canceled and the hearing record closed. The matter is remanded to Department staff to continue processing the application to issue the requested permits.

V. APPEALS

By email dated October 17, 2017, the Commissioner's office modified the appeals schedule established in the September 8, 2017 Issues Ruling. Accordingly, appeals from the September 8, 2017 Issues Ruling and this supplemental issues ruling are due by 4:00 PM on Wednesday, November 15, 2017. Replies to any appeals are authorized and are due by 4:00 PM on Friday, December 15, 2017.

The original and two copies of each appeal and reply thereto must be filed with Commissioner Basil Seggos (Attention: Louis A. Alexander, Assistant Commissioner for Hearings and Mediation Services), at the New York State Department of Environmental Conservation, 625 Broadway (14th Floor), Albany, New York 12233-1010. In addition, one copy of each submittal must be sent to the undersigned, Department staff, and applicant at the same time and in the same manner as the submittals are sent to the Commissioner. Service of papers on the Commissioner, Department staff, applicant and the undersigned by electronic mail is permitted provided conforming hard copies are sent by regular mail and post marked by the due date. Service of papers by facsimile transmission (FAX) is not permitted, and any such service will not be accepted.

All papers shall be served upon the remaining parties on the service list by methods agreed to by the parties.

[1] For a complete discussion of the procedural posture of this proceeding up to the issuance of the Issues Ruling, see the Issues Ruling at 1-11.

[2] Seneca Lake Communities includes Seneca County, Yates County, Town of Fayette, Town of Geneva, Town of Ithaca, Town of Romulus, Town of Starkey, Town of Ulysses, Town of Waterloo, City of Geneva, Village of Watkins Glen, and Village of Waterloo.

[3] Each document is marked as "NYSDEC OHMS Document No. 201166576" followed by a hyphen and a five digit suffix ( see Exhibit List, attached). Here after, documents will be referenced as "OHMS Doc. No." followed by the five digit suffix. If the document also appears on the document list last updated November 3, 2017 ( see attached), the document is also identified with "Doc. List" and the document list number.

[4] The unredacted hard and electronic copies of item no. 69 have been marked "Confidential" and are separately maintained in the hearing file in folders also marked "Confidential."

Seneca County, Yates County, Town of Fayette, Town of Geneva, Town of Ithaca, Town of Romulus, Town of Starkey, Town of Ulysses, Town of Waterloo, City of Geneva, Village of Watkins Glen, and Village of Waterloo (Seneca Lake Communities), Petition for Full Party Status (Jan. 16, 2015)

x

x

With original affidavits of Scott Gibson and James Bromka received Jan. 23, 2015, incorporated